DOWNLOAD DECK —> https://bundl.buzz/bu-spinoff What’s the ideal entity set-up for a corporate venture: business unit or spin-off? We've examined the benefits of each to help your choice, in our latest report. Together with Yannick Verryke and Timmy Baert, we defined and compared each entity format to provide you deeper insight and help you make the right decision for your corporate venture. Download your copy using the following link: https://bundl.buzz/bu-spinoff

1. The corporate
venture
dilemma:
business unit
vs spin-off.
In collaboration with

2. Introduction.
P a r t 0 1 .

3. What are your
motivations to choose
the entity format for
your corporate
venture?
Run through the main
criteria with us to get
a deeper insight.
As a corporate venture development firm, we have come
across the same crucial crossroad with our clients time
after time: what’s the ideal entity set-up for a corporate
venture?
Spin-off, spin-in, carve-out, spin-along, business unit, new
product offering under an existing brand, a new brand
under an existing corporate structure… there are so many
ways to structure your corporate venture, and there is no
black or white answer. One thing is for sure; this decision
has a crucial impact on the speed and success of your
corporate venture.
In this deck, we focus on the decision between a business
unit and spin-off, since this the most common dilemma we
come across in ventures that tend to go further away from
the core activities of the company.
We will guide you through the definitions of both entities,
compare them with the benefits, and provide vital
additional perspectives to keep in mind when making your
choice.
Special thanks:
Yannick Verryke from Cresco Law and
Timmy Baert, who co-authored this report.
Thomas Van Halewyck
Co-founder and managing
partner at Bundl
LINKEDINEMAIL

4. Definition.
P a r t 0 2 .

5. D E F I N I T I O N
Business Unit
vs Spin-off
A business unit is a fully-functional
unit with its own vision and direction.
Typically, a strategic business unit
operates as a separate unit, but it is
also an essential part of the existing
legal structure of the
parent company.
A spin-off refers to a process of
creating a new company
that operates separately from an
existing one (e.g. through the
incorporation of a subsidiary or
joint-venture).
The spin-off, the newly created
company, has its own assets and
distinct business operations that are
no longer under the control of the
parent company.
Business Unit Spin-off
Before we make a trade-
off between the two
different types of entities,
let’s first help you by
defining them.

6. Comparison.
P a r t 0 3 .

7. Easier to maintain strategic
synergies from a consolidated
group perspective.
(other BU product roadmaps, …)
Easier to maintain strategic focus
in both the parent company and
spin-off, and to diverge.
Strategy
Stakeholders
Easier to involve third-party
investors or management with
a minority or majority stake.
Single-source decision
making, with more autonomy
and a clear and more concise
board structure.
Reporting structure
aligned with corporation.
Independent reporting rhythm and
structure, with tailored KPI
strategy.
Reporting
Easier to maintain strategic
synergies and aligned
reporting structure.
Easier to maintain focus and
a faster decision-making
structure.
Business Unit
Strategy &
Governance
Spin-off
Governance
Structure
Aligned with internal policy
and corporate interest.
Board of directors structure, with
minority/majority control.

8. Easier to perform “corporate
power” in legal conflicts.
Easier to insulate your business’
assets from liability.Liability
Politics
Legal & procurement
department, docs & policies at
hand.
Not restricted by ‘heavy’
corporate procedures.
Easier to leverage existing supplier
network & deals, but restricted by
corporate group interests (minimum
order quantity, credit lines, …)
More autonomy. No restrictions to
suppliers, and corporate competitor
collaboration possible.
Freedom to
Operate
Easier to leverage corporate
power, procedures, and
supplier network.
Easier to insulate from liability, set
up faster with tailor-made
procedures, and more freedom to
operate.
Business Unit Spin-off
Legal &
Procurement

9. Business Unit Spin-off
Leverage of internal HR
department.
(contracting, HR admin, …)
No restrictions to corporate
procedures.Recruitment
Attracting talent
Easier access to internal
resources (also temporary).
Easier to attract external
entrepreneurial talent.
Ownership
Risk of resources reprioritising
or part-time mindset. Full-time focused team.
Incentives
Ability to plug in existing
compensation strategy &
packages.
No limitations on compensation
packages and equity incentives
possible.
People &
Operations
Easier access and leverage
of internal resources and
corporate HR department.
Easier to have a dedicated leadership
team, faster hiring procedures, and
equity incentives possible.

10. OPEX investments when needed
and easier to shift internal budgets.
Access to own funds and easier
to open capital structure to
future investors.
Budgeting
Reporting
More flexibility around revenue/
cost and profit allocation through
internal transfers.
Ability to operate without corporate
cost structure, creating objective and
transparent view.
Consolidated revenues &
value with corporation.
Ability to execute an exit strategy to
reach higher/faster/optimized ROI.Market Value
Ability to tailor to the needs
of the corporation.
Business Unit Spin-off
Finance
& Tax
Tax
Fewer tax benefits from keeping
subsidiaries as a consolidated
organisation.
Allows the divestment of a non-
core business in a tax-efficient
manner.
Ability to tailor to the needs of
the spin-off, and unlock
shareholder value.

11. Easier to leverage the corporate
brand portfolio to gain customer
trust.
More freedom to experiment, with
less brand impact on corporation.Branding
Channels
Ability to leverage existing owned-
and-operated channels.
Less obligations to align with internal
stakeholders and more freedom to
operate in new channels.
Ability to leverage existing
partnerships with internal
stakeholders and agencies to
execute campaigns at scale.
Ability to experiment quickly and
adapt growth-marketing tactics
on the go.
Marketing
Business Unit Spin off
Branding &
Marketing
More opportunity to leverage
existing brand portfolio, channels
and marketing department.
More flexibility to experiment
with new brands, channels &
marketing tools.

12. Leverage of existing corporate IT
infrastructure & development
partnerships.
Ability to have tailor-made IT
infrastructure.IT Support
Sales teams
Leverage of existing sales teams
and network.
Ability to have a fully dedicated
sales team in place with clear
tailored objectives.
Ability to leverage existing assets
of the corporation as an unfair
advantage.
Ability to build a tailor-made
environment and team.
Business Unit Spin-off
Other
Production
Leverage of existing production
facilities, departments, and
partnerships.
Ability to have a tailor-made
production team and facility or
partnership.

13. Overview.
P a r t 0 4 .

14. Easier to maintain strategic synergies
and aligned reporting structure.
Easier to maintain focus, more
autonomy, and a faster decision-
making structure.
Strategy &
Governance
Legal &
Procurement
Easier to leverage corporate power,
procedures, and supplier network.
Easier to insulate from liability, set up
faster with tailor-made procedures, and
more freedom to operate.
Easier access and leverage of internal
resources and HR department.
Easier to have a dedicated leadership
team, faster hiring procedures, and
equity incentives possible.
People &
Operations
Business Unit Spin-off
Finance &
Tax
Branding &
Marketing
Other
Ability to tailor to the needs of
the corporation.
Easier to leverage existing brand
portfolio, channels and departments.
Ability to leverage the existing assets of
the corporation as an unfair advantage.
Ability to tailor to the needs of
the spin-off, and unlock
shareholder value.
More flexibility to experiment with new
brands, channels & marketing tools.
Ability to build a tailor-made
environment and team.
Comparison
Overview.
O v e r v i e w .
This overview highlights
the main conclusions of
each of the different main
criteria.

15. Key additional
perspectives.
P a r t 0 5 .

16. Existing
Existing New offerings
Newmarkets
Developing
breakthroughs and
inventing things for
markets that don't
exist yet.
Radical
Innovation
Expanding from
existing business to
‘new to the company’
business
Adjacent
Innovation
Optimising existing
products for existing
customers
Core
Innovation
Business unit structure
Spin-off structure
Recommendation
On the
innovation
Matrix.
I n n o v a t i o n M a t r i x .
The further away from the core
business the new corporate
venture operates, the less it will
presumably leverage core
corporate assets, thus benefiting
more from a spin-off set-up.

17. Key success
factors of
corporate
ventures to
keep in mind.
S u c c e s s f a c t o r s .
The prime goal is to create
value and the following
factors will aid in getting
there faster. Keep each of
these in mind when
choosing the best venture
structure.
Agility.
Unfair
advantage.
Team.
Focus.
Agility is one of the key success drivers for any startup out there.
Make sure you choose the structure that provides the right agility for
your venture to pivot and adapt quickly.
Leveraging your corporate assets is your unfair advantage in the
market. The key is structuring your corporate venture to leverage
these assets without losing speed or building restrictions.
Having the right team in place is ranked in the top 3 of most startup
success factors. Think twice about which structure allows you to
attract and incentivise the right internal or external talent.
A new venture needs a clear strategy, dedication, and focus. And
choosing the right structure can affect the focus of your venture, so
beware.

18. Want to discuss how
best your venture can
be structured?
Reach out to me.
Thomas Van Halewyck
Co-founder and managing
partner at Bundl
LIN KEDINE MAIL